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Explore our PPA insights within the renewable energy industry.


Energy Studies | 30th Jun, 2023

The role of Market Agents

Ensuring the balance in an electric market deemed by the volatile nature of renewables.

Reading time : 3 min

Written by

Tomás Oliveira

Balancing electricity generation with demand in real time is the backbone of a stable and reliable electrical grid.

Market Agents are the key players in the balancing process as they settle the occurred deviations by monitoring the real-time imbalances and facilitating the settlement process, which may involve financial penalties or incentives to correct deviations.


Market Agents

An entity responsible for selling the electricity produced through a renewable energy project to the market, on behalf of a generator, by making economic offers to the Market Operator within a given electricity market.

Market Agent interaction process

The Market Agent informs the Market Operator each day about the expected electricity delivery amounts from the project they represent.


Dealing with the uncertainty of renewables

The expected electricity delivery amounts are based on weather forecasts that estimate renewable energy generation.

Market Agent interaction

However, due to the unpredictable nature of renewable energy sources, unforeseen events like weather pattern changes can lead to imbalances between the forecasted and actual electricity deliveries.

Market Agent interaction process


Balancing the uncertainty

In such cases, the Market Agent communicates these imbalances to the Market Operator to reconcile the differences, ensuring that the initially communicated amount is matched.

Market Agent interaction process


How does Balancing work?

Balancing is the process of matching electricity generation with demand in real-time to maintain grid stability and ensure a reliable power supply.


Tackling Imbalances in the electricity market

Imbalances occur when the actual electricity generation or consumption deviates from the scheduled or contracted amounts.

The task of the Market Agent

To reconcile these imbalances between the buyer and the generator.


By monitoring the real-time imbalances and facilitating the settlement process, which may involve financial penalties or incentives to correct deviations.

Did you know...

Market Agents may request the historical data from the generator to be better equipped with knowledge and make more accurate decisions, reducing production and financial risks for the generator.


The Market Agents' main responsibilities


Market Operators

The entity responsible for operating and managing the electricity market in a specific region or jurisdiction.

Market Operators manage the financial aspects of the electricity system, including the day-ahead and intraday markets.

They receive and process bids for electricity sales and purchases, ensuring smooth management and settlement of all operations in these markets.

In example

The Iberian electricity market (MIBEL), is managed by OMIE, operating the spot market.


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